Finding Affordable Housing Solutions in Boston

(This article was also published by the national Roosevelt Institute here.)

Innovative solutions are needed to solve the serious problem of housing affordability in the Boston area.

The housing affordability crisis is reaching dramatic levels in Massachusetts. Case in point: according to The Boston Foundation’s Greater Boston Housing Report Card, “during the last eight years, the cost of living in Greater Boston has increased twice as fast as the median household income of homeowners and three times faster than the median household income of renters.” Affordability is a problem for 40 percent of homeowners in the area. For many families, owning a home is not even an option. The U.S. Census ranks Massachusetts 44th in homeownership and also 44th in income equality. These two rankings are not coincidental.

Homeownership increases social mobility and acts as a buffer against falling into poverty. For example, as an inheritance, a home can improve the economic outlook for future generations. Homes also have strong symbolic value as a key component of the American Dream. For these reasons, increasing access to homeownership is an important tool in the fight against inequality in America. Federal policies like the home mortgage interest deduction provide large financial incentives for homeownership. Other incentives and assistance may be needed.

Comprehensive efforts to maintain and increase the availability of affordable housing must involve all levels of government, in addition to nonprofits like local community development corporations. The private housing market will continue to drive up prices, so there is a need for creative solutions that avoid or reduce normal market pressures.

For example, cohousing or cooperative arrangements can allow for cost sharing and rent moderation. In a limited equity cooperative, members buy shares of a corporation that owns the housing. The corporation makes decisions democratically, can pay for building improvements, and removes the profit motive from property ownership. The value of a share is limited. There is, however, need for more bank financing of housing cooperatives, which could be addressed through state regulations or the use of community development financial institutions (CDFIs) – locally-based financial institutions targeting underserved populations.

Another possible solution is affordable housing trust funds operated at the city level, which are financed through property taxes, government funds, or fees levied on building developers. The trust funds can subsidize construction of new housing and provide direct subsidies to homeowners. The city of Somerville near Boston operates such a fund that loans money for down payments to first-time homebuyers and renters.

Affordable housing solutions must also involve local colleges and universities. Greater Boston has a large student population. Graduate students in particular are increasing in number, which drives up the cost of housing for student and non-student residents alike. City government could work with colleges to construct additional low-cost student housing to alleviate some of this upward price pressure.

High housing prices affect the ability of young professionals and families to remain in the Boston area. This in turn reduces the city’s economic and social potential. Pipeline Greater Boston is organizing a series of discussions to examine possible solutions to housing issues that affect these groups. There is a need for civically engaged young people in Boston to implement new policy ideas and address the housing crisis that is affecting them, their neighborhoods, and the city as a whole.

Gavin O’Brien is a recent graduate of Brandeis University’s Master of Public Policy program and a core member of the Greater Boston City Network of Roosevelt Institute | Pipeline.